Manufacturing in Japan Slows in July as Orders Drop

Business in Japan continued to struggle in July, with manufacturing activity falling further and the service sector growing more slowly than in June, according to surveys released on Monday.

July saw a drop from June’s 49.8 to July’s 49.4 for the au Jibun Bank flash Japan manufacturing purchasing managers’ index (PMI). The 50.0 index point threshold distinguishes contraction from expansion.

Production and export orders both continued to fall, albeit at a slower rate than before, while new orders dropped at their sharpest rate since March.

The au Jibun Bank flash services PMI fell to 53.9 in July from 54.0 in June, the lowest reading since January. New service businesses grew at their slowest rate since January, while employment levels declined.

Manufacturing cost pressures have been easing as input price inflation has slowed to its lowest rate since February 2021, according to S&P Global Market Intelligence, which compiled the survey.